Download Effectiveness - National Caucus of Environmental Legislators (NCEL)

State Climate Policy Solutions
For a new, stronger, clean energy economy
NCEL
09.08.09
K.C. Golden
Policy Director
“We are addicted to oil”
Symptoms:
Economic hemorrhaging:
$450 M per month in King
County
Fever: increasing average
temp is the least of it
“We are addicted to oil”
Symptoms:
Economic hemorrhaging: Over $450 M
per month in King County
Fever: increasing average temp is the least
of it
Acute national insecurity:
“Paying for both sides of the
war on terror”
Treatments for addiction
• Gas tax holiday: Cheaper drugs
• Drilling: Increase the supply of
drugs
 Quit: Steadily
reduce dependence…..
….by building a clean
energy economy….
CAP
Policy commitment to steadily
reduce fossil fuel dependence
…and a platform for
launching a green economy
State policies:
Climate plans
Maps from Pew Center
State policies:
Renewable Portfolio Standards
State policies:
Vehicle GHG Standards
State policies:
Commercial energy codes
Cap makes it real:
Get your wedge on!
Key principles for
climate policy design
• EFFECTIVENESS
• EFFICIENCY
• EQUITY
Effectiveness - Scale
Effectiveness - Scale
How much do we have to reduce climate pollution?
Enough to stabilize the concentration of GHGs in the
atmosphere “at a level that would prevent dangerous
anthropogenic interference with the climate system.”
How much is that?
Avoid increases in average global temperature of > 2
degrees C
How much is that?
Stabilize the concentration of GHGs at 350-450 ppm
So how much do we have to reduce climate pollution?
80% by 2050. More in the U.S.
Avoiding Dangerous Climate Change – Cambridge University Press
Effectiveness - Build
Effectiveness – Get going!
Efficiency
Equity
Internationally
Domestically
Sectors, geographies,
industries, economics
Equity – Green for all
Design issues
Cap and trade vs. Carbon tax
Effectiveness: Quantity,
not price, is the public
policy imperative
Trade
Investments
Tax
Standards
Incentives
Design issues -- scope
More is better
• Effectiveness: Reduce more
• Efficiency: liquidity, simplicity
• Equity: not just point sources
Design issues – emission rights
Auction or give away?
• Effectiveness: rewards
innovation; facilitates
investment, consumer
protection
• Efficiency: simpler (baselines, early action)
• Equity: avoids windfalls; level playing field
Design issues - Offsets
Limit them
• Effectiveness: discourages transformation
• Carbon storage in biomass not equivalent
to emission reduction
• Efficiency: verification is complex;
“additionality” – critical, but counterfactual
• Equity: aggravates environmental justice
concerns; intergenerational foul
Cap and trade works for acid rain
Annual Mean Wet Sulfate Deposition
1989-1991
2004-2006
Acid Rain SO2 Program Costs: Much
Lower than Originally Predicted
Acid Rain Program: Proje cte d Annual Costs at Full Imple me ntation in 20
9
$ Billion (2006$)
8
7
EEI
6
EPA
5
4
3
EPRI
2
GAO
EPA
1
0
Source: EPA, 2006
1990
1994
2004
Fossil fuel price politics
• Concern that climate policy will
raise prices
• But prices are through the roof now!
• Why? Supply and demand.
• What drives the opposition?
It will reduce our
consumption of fossil fuels
Public opinion
• Public “favors” drilling
• But they favor efficiency, renewables,
and climate solutions by wider
margins
• Bottom line:
Do something!
Why states?
“Global” warming is a local,
state and regional issue
State Climate Policy Solutions
For a new, stronger, clean energy economy
NCEL
09.08.09
K.C. Golden
Policy Director